Also bracing for slower US growth due to election uncertainty, protectionist sentiment

A new Bank of Canada survey suggests while companies are anticipating modestly better days ahead for exports, they’re also bracing for slower U.S. growth due to uncertainty about the outcome of the presidential election.

The central bank’s latest business outlook survey shows Canada’s biggest trading partner is still seen by firms as the main driver of positive expectations for exports.

But the poll also finds that Canadian companies are also expecting U.S. growth to be slower overall — a view often linked to a presidential campaign that has helped stir up protectionist sentiment.

“In this context, some firms noticed a recent soft patch in demand for their products and services from clients south of the border,” the bank’s report said.

Overall, the survey says firms’ sales growth expectations for the next 12 months have improved modestly from a weak level in the July edition of the quarterly poll. The report said this was mostly because sales stabilized among businesses exposed to the resource sectors which have been battered by two painful years of low commodity prices.

“Many resource-related firms, such as those in the oil and gas or mining, sense that activity has hit bottom,” the report said.

“Given the relatively stable commodity prices in recent months, businesses now cautiously believe that sales will no longer fall, or will increase modestly.”

The report also found hiring expectations of firms increased from relatively low levels in past surveys — with close to half of the roughly 100 companies polled saying they intended to add jobs over the coming year. The positive employment intentions, the document added, were more widespread across all regions and in most sectors.

The poll found a growing number of businesses in industries that have seen gradual improvements have reported some difficulties in filling vacant positions. Some also mentioned difficulties finding replacements for skilled, experienced workers who have retired.

The survey also suggested that investment intentions for machinery and equipment increased in the autumn survey, but that the scale of spending intentions seems limited overall.